Pinnacle Financial Reports Second Quarter 2009 Results

Pinnacle Financial Partners Inc. (Nasdaq/NGS: PNFP) today reported fully diluted loss per common share available to common stockholders of ($1.33) for the quarter ended June 30, 2009, compared to $0.34 of earnings per fully diluted common share available to common stockholders for the quarter ended June 30, 2008.

Fully diluted loss per common share available to common stockholders was ($1.34) for the six months ended June 30, 2009, compared to $0.60 of earnings per fully diluted common share available to common stockholders for the six months ended June 30, 2008.

Net loan growth during the second quarter of 2009 was $70 million, compared to $119 million reported in the first quarter of 2009. Net loan growth for the second quarter of 2009 was negatively impacted by net charge-offs of $44.6 million. At June 30, 2009, Pinnacle’s allowance for loan losses was 1.86 percent of total loans, compared to 1.30 percent at March 31, 2009, and 1.05 percent at June 30, 2008.

Pinnacle also reported that core funding growth was $96 million during the second quarter of 2009.

"Our second quarter results reflect significantly increased provisioning due to increased nonperforming loans, credit losses and deterioration in the economies of our principal markets,” said M. Terry Turner, Pinnacle president and chief executive officer. "We have previously disclosed that our second quarter results would reflect significantly increased credit costs associated primarily with our residential construction and land development portfolio. The second quarter results were particularly impacted because we had a concerted effort to thoroughly evaluate this portfolio and subject maturing loans to modified underwriting procedures. As a result of that review and current economic conditions, many of these loans were partially charged off or placed on nonaccruing status.

"While we will continue to aggressively address our credit issues, we also will continue to focus on our core business strategies and grow the pre-provision net revenue capacity of this firm during 2009,” Turner said.

SECOND QUARTER 2009 HIGHLIGHTS:

• Operating results
  • Revenue (the sum of net interest income and noninterest income) for the quarter ended June 30, 2009, amounted to $41.11 million, compared to $36.74 million for the same quarter of last year, an increase of 11.91 percent.
  • Net loss available to common stockholders for the second quarter of 2009 was ($33.2 million), compared to the prior year’s second quarter net income of $7.96 million. Included in the net loss available to common stockholders was $1.47 million of preferred stock dividends and issue costs related to securities issued under the U.S. Treasury’s Capital Purchase Program.
• Continued balance sheet growth
  • Loans at June 30, 2009, were $3.54 billion, up $511 million from $3.03 billion at June 30, 2008, representing an annual organic growth rate of 16.88 percent.
  • Total deposits at June 30, 2009, were $3.76 billion, up $609 million from $3.15 billion at June 30, 2008, representing a growth rate of 19.3 percent.
  • Core funding (all deposits except time deposits greater than $100,000) amounted to $2.09 billion at June 30, 2009, an increase of 14.3 percent from the $1.93 billion at June 30, 2008.
• Credit quality
  • Net charge-offs were $44.6 million for the three months ended June 30, 2009, compared to $870,000 for the three months ended June 30, 2008. Net charge-offs as a percentage of average loan balances were 2.81 percent (annualized) for the six months ended June 30, 2009, compared to 0.07 percent (annualized) for the six months ended June 30, 2008. Approximately 48 percent of the second quarter charge-offs were related to a single $21.5 million loss on a loan to a bank holding company disclosed in May of this year.
  • Nonperforming assets were 3.34 percent of total loans and other real estate at June 30, 2009, compared to 0.86 percent at Dec. 31, 2008, and 0.73 percent at June 30, 2008.
  • Past due loans over 30 days, excluding nonperforming loans, were 0.52 percent of total loans and other real estate at June 30, 2009; 0.60 percent at Dec. 31, 2008; and 0.34 percent at June 30, 2008.
• Capital
  • At June 30, 2009, Pinnacle’s ratio of tangible common stockholders’ equity to tangible assets was 7.4 percent, compared to 6.2 percent at Dec. 31, 2008. Pinnacle’s tangible book value per common share was $10.80 at June 30, 2009, compared to $11.70 at Dec. 31, 2008.
  • At June 30, 2009, Pinnacle’s total risk based capital ratio was 15.0 percent, compared to 13.5 percent at Dec. 31, 2008.

"We are very pleased with the successful completion of our $115 million common equity capital raise during the quarter and the impact it has had on the capitalization of this firm,” Turner said. "This capital has positioned us to seek permission to redeem the preferred stock we issued to the U.S. Treasury.

"Our most important strategy since our inception in 2000 has been to hire experienced professionals who are able to attract the market’s best clients, grow loans, deposits and fee-based businesses and apply sound credit practices. We continue to believe that Nashville and Knoxville are two of the most attractive banking markets in the country and that the competitive landscape continues to offer solid growth potential for our firm as evidenced by the continued double digit growth in loans and core funding,” Turner said.

CREDIT QUALITY

• Allowance for loan losses represented 1.86 percent of total loans at June 30, 2009, compared to 1.05 percent a year ago.
• Provision for loan losses was $65.32 million for the second quarter of 2009, compared to $2.79 million for the second quarter of 2008.
  • During the second quarter of 2009, the firm recorded net charge-offs of $44.6 million, compared to net charge-offs of $870,000 during the same period in 2008. Annualized net charge-offs to total average loans were 2.81 percent for the six months ended June 30, 2009.

"Excluding the $21.5 million credit loss to a bank holding company already noted, we are reporting credit losses of $23.03 million during the second quarter of 2009. Based on our current forecasts, we continue to believe that credit losses, excluding the $21.5 million noted above, will approximate 1.00 percent of average loans this year,” Turner said.

Turner noted that the Nashville real estate market appears to be stabilizing with median home prices reflecting modest increases on a linked-quarter basis and down only 3 percent from June 30, 2008. Residential inventories at June 30, 2009, were down from June 30, 2008, levels with the months of residential inventory approximating eight months for both periods.

As noted above, Pinnacle reported that nonperforming loans and other real estate owned as a percentage of total loans and other real estate owned increased from 0.86 percent at Dec. 31, 2008, to 3.34 percent at June 30, 2009. The following is a summary of the activity in various nonperforming asset categories for the quarter ended June 30, 2009:

			Balances				Payments, Sales								Balances
(in thousands)			Mar. 31, 2009				and Reductions				Increases				June 30, 2009
Nonperforming loans:
Residential construction & development			$	24,467			$	14,545			$	61,381			$	71,303
Other				9,396				10,585				30,214				29,025
Totals				33,863				25,130				91,595				100,328
Other real estate:
Residential construction & development				19,170				5,860				2,924				16,234
Other				647				857				2,821				2,611
Totals				19,817				6,717				5,745				18,845
Total nonperforming assets			$	53,680			$	31,847			$	97,340			$	119,173

REVENUE

• Net interest income for second quarter 2009 was $30.51 million, compared to $27.68 million for the same quarter last year, an increase of 10.22 percent.
  • Net interest margin for the second quarter of 2009 was 2.75 percent, compared to a net interest margin of 2.72 percent for the first quarter of 2009 and 3.24 percent for the same period last year.
• Noninterest income for the second quarter 2009 was $10.60 million, a 17.04 percent increase over the $9.06 million recorded during the same quarter in 2008.

"We expected to see a modest increase in our margins from the first quarter of 2009,” said Harold R. Carpenter, Pinnacle’s chief financial officer. "We are optimistic that we will see continued improvement in our margins in the third and fourth quarters of 2009. The reversal of previously accrued loan interest income related to loans that were placed on nonaccrual in the quarter negatively impacted our net interest margin by approximately 10 basis points during the second quarter of 2009.”

Net interest income was $30.5 million during the second quarter of 2009, which was an all-time high for Pinnacle and represented an increase of 6.3 percent over the first quarter of 2009 net interest income and an increase of 10.2 percent over the second quarter of 2008 net interest income.

Noninterest income was $10.6 million during the second quarter of 2009, up from the $9.1 million during the second quarter of 2008. Noninterest income declined 19.28 percent on a linked-quarter basis due primarily to a decrease in the amount of gains on the sale of investment securities. During the first quarter of 2009, the firm recorded net gains on the sale of investment securities of approximately $4.3 million as a result of restructuring the bond portfolio, compared to $2.1 million during the second quarter of 2009. Another item contributing to the decrease between the second quarter of 2009 and the first quarter of 2009 in noninterest income was $376,000 of insurance contingency fees collected in the first quarter of 2009.

During the second quarter of 2009, Pinnacle's mortgage origination unit sold a record $213.2 million of mortgage loans, compared to $79.7 million during the second quarter of 2008, an increase of 167.5 percent. Gross fees on these loan sales were $3.03 million in the second quarter of 2009, compared to $1.36 million in the second quarter of 2008.

As of June 30, 2009, the firm employed 129 associates in the investment, trust, mortgage and insurance fee businesses, compared to 108 associates at June 30, 2008, an increase of 19.4 percent in capacity for these business units. Noninterest income during the second quarter of 2009 represented approximately 25.79 percent of total revenues, compared to 24.66 percent for the same quarter in 2008.

NONINTEREST EXPENSE AND TAXES

• Noninterest expense for the quarter ended June 30, 2009, was $30.61 million, compared to $23.08 million in the second quarter of 2008.
• Compensation expense was $12.68 million during the second quarter of 2009, compared to $14.75 million during the first quarter of 2009 and $12.50 million during the second quarter of 2008. The decrease in compensation expense between the second quarter of 2009 and first quarter of 2009 was due primarily to the reversal of approximately $1.0 million of incentives previously recorded in the second quarter of 2009.
• Included in noninterest expense for the second quarter of 2009 was $3.9 million in other real estate expenses, of which $1.1 million was attributable to losses on the sale of other real estate properties.
• The second quarter of 2009 noninterest expense included the accrual of a $2.3 million special assessment from the FDIC that will be paid during the third quarter of 2009.
• The efficiency ratio (noninterest expense divided by net interest income and noninterest income) was 74.4 percent during the second quarter of 2009, compared to 59.5 percent for the fourth quarter of 2008 and 62.8 percent in the second quarter of 2008.
• The effective tax benefit rate for the second quarter of 2009 was approximately 42.9 percent, compared to a 26.8 percent effective tax expense rate for the same quarter in 2008.

"Our effective tax rate continues to reflect various tax saving initiatives,” Carpenter said. "Our current projections indicate that we will approximate a 50 percent effective tax benefit rate for the year ending Dec. 31, 2009.”

Carpenter noted that the firm would evaluate impairment of goodwill, if necessary, prior to filing its Form 10-Q with the Securities and Exchange Commission.

INVESTMENTS IN FUTURE GROWTH

• Pinnacle has hired 41 highly experienced associates for its denovo expansion to Knoxville that was announced on April 9, 2007. Loans outstanding in Knoxville at June 30, 2009, were $357.6 million. Pinnacle currently has an additional full-service office under construction in the Fountain City area of Knoxville and another in the Farragut area. Both should open in the fourth quarter of 2009.
• Pinnacle also has two new Nashville offices under construction – in the Belle Meade area and in Brentwood, Tenn. Both are expected to open in late fourth quarter of 2009, with two existing Brentwood locations consolidating into the new Brentwood office. The firm also plans to locate a new office in the 100 Oaks area of Nashville, which is projected to open in the first half of 2010.
• Pinnacle's total associate base at June 30, 2009, was 746.0 full-time equivalents (FTEs), compared to 704.5 at June 30, 2008. Pinnacle anticipates increasing its associate base by approximately 35 associates during the remainder of 2009.

WEBCAST AND CONFERENCE CALL INFORMATION

Pinnacle will host a webcast and conference call at 8:30 a.m. (CDT) on Wednesday, July 22, 2009, to discuss second quarter 2009 results and other matters. Interested parties are invited to participate by dialing 1-800-322-9079 and using passcode #18967259. The presentation will also be available via webcast at www.pnfp.com by clicking on the link to the investor relations section of the website.

Pinnacle Financial Partners provides a full range of banking, investment, mortgage and insurance products and services designed for small- to mid-sized businesses and their owners, real estate professionals and individuals interested in a comprehensive relationship with their financial institution. Comprehensive wealth management services, such as financial planning and trust, help clients increase, protect and distribute their assets.

The firm began operations in a single downtown Nashville location in October 2000 and has since grown to over $5 billion in assets at June 30, 2009. In 2007, Pinnacle launched an expansion into Knoxville, another high growth MSA. At June 30, 2009, Pinnacle is the second-largest bank holding company headquartered in Tennessee, with 31 offices in eight Middle Tennessee counties and two in Knoxville. The firm is the fastest growing of the 218 national banks chartered in 2000 and in 2009 was added to Standard & Poor’s SmallCap 600 index.

Additional information concerning Pinnacle can be accessed at www.pnfp.com.

Certain of the statements in this release may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" and similar expressions are intended to identify such forward-looking statements, but other statements not based on historical information may also be considered forward-looking. All forward-looking statements are subject to risks, uncertainties and other facts that may cause the actual results, performance or achievements of Pinnacle to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, without limitation, (i) deterioration in the financial condition of borrowers resulting in significant increases in loan losses and provisions for those losses; (ii) continuation of the historically low short-term interest rate environment; (iii) the inability of Pinnacle Financial to continue to grow its loan portfolio at historic rates in the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA; (iv) changes in loan underwriting, credit review or loss reserve policies associated with economic conditions, examination conclusions, or regulatory developments; (v) increased competition with other financial institutions; (vi) greater than anticipated deterioration or lack of sustained growth in the national or local economies including the Nashville-Davidson-Murfreesboro-Franklin MSA and the Knoxville MSA, particularly in commercial and residential real estate markets; (vii) rapid fluctuations or unanticipated changes in interest rates; (viii) the results of regulatory examinations; (ix) the development of any new market other than Nashville or Knoxville; (x) a merger or acquisition; (xi) any activity in the capital markets that would cause Pinnacle Financial to conclude that there was impairment of any asset, including intangible assets; (xii) the impact of governmental restrictions on entities participating in the Capital Purchase Program, of the U.S. Department of the Treasury (the "Treasury”); (xiii) changes in state and federal legislation, regulations or policies applicable to banks and other financial service providers, including regulatory or legislative developments arising out of current unsettled conditions in the economy; and (xiv) the inability of Pinnacle Financial to secure the approval of the Treasury and its bank subsidiary’s primary federal regulator for the redemption by Pinnacle Financial of the Series A preferred stock sold by Pinnacle Financial to the Treasury in the Capital Purchase Program. A more detailed description of these and other risks is contained in Pinnacle’s most recent annual report on Form 10-K as updated by its Current Report on Form 8-K filed with the Securities and Exchange Commission on June 10, 2009. Many of such factors are beyond Pinnacle's ability to control or predict, and readers are cautioned not to put undue reliance on such forward-looking statements. Pinnacle disclaims any obligation to update or revise any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS – UNAUDITED
			June 30, 2009					December 31, 2008
ASSETS
Cash and noninterest-bearing due from banks			$	48,244,961				$	68,388,961
Interest-bearing due from banks				53,197,920					8,869,680
Federal funds sold and other				8,202,688					12,994,114
Cash and cash equivalents				109,645,569					90,252,755
Securities available-for-sale, at fair value				917,387,417					839,229,428
Securities held-to-maturity (fair value of $8,641,197 and $10,469,307 at June 30, 2009 and December 31, 2008, respectively)				8,697,285					10,551,256
Mortgage loans held-for-sale				27,960,291					25,476,788
Loans				3,544,175,900					3,354,907,269
Less allowance for loan losses				(66,075,358	)				(36,484,073	)
Loans, net				3,478,100,542					3,318,423,196
Premises and equipment, net				69,375,573					68,865,221
Other investments				36,931,884					33,616,450
Accrued interest receivable				18,105,853					17,565,141
Goodwill				244,116,260					244,160,624
Core deposit and other intangible assets				15,236,635					16,871,202
Other real estate				18,844,859					18,305,880
Other assets				92,339,377					70,756,823
Total assets			$	5,036,741,545				$	4,754,074,764
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing			$	470,048,740				$	424,756,813
Interest-bearing				360,664,283					375,992,912
Savings and money market accounts				826,467,439					694,582,319
Time				2,104,264,005					2,037,914,307
Total deposits				3,761,444,467					3,533,246,351
Securities sold under agreements to repurchase				215,135,151					184,297,793
Federal Home Loan Bank advances and other borrowings				228,316,728					201,966,181
Federal Funds purchased				-					71,643,000
Subordinated debt				97,476,000					97,476,000
Accrued interest payable				9,007,931					8,326,264
Other liabilities				21,589,323					29,820,779
Total liabilities				4,332,969,600					4,126,776,368
Stockholders’ equity:
Preferred stock, no par value; 10,000,000 shares authorized; 95,000 shares issued and outstanding at June 30, 2009 and December 31, 2008				88,877,600					88,348,647
Common stock, par value $1.00; 90,000,000 shares authorized; 32,929,747 issued and outstanding at June 30, 2009 and 23,762,124 issued and outstanding at December 31, 2008				32,929,747					23,762,124
Common stock warrants				3,348,402					6,696,804
Additional paid-in capital				522,567,295					417,040,974
Retained earnings				52,147,201					84,380,447
Accumulated other comprehensive income, net of taxes				3,901,700					7,069,400
Stockholders’ equity				703,771,945					627,298,396
Total liabilities and stockholders’ equity			$	5,036,741,545				$	4,754,074,764
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS – UNAUDITED
			Three Months Ended									Six Months Ended
			June 30,									June 30,
			2009					2008				2009					2008
Interest income:
Loans, including fees			$	39,626,873				$	42,227,538			$	78,152,618				$	87,619,700
Securities:
Taxable				8,393,225					4,792,481				17,480,912					9,429,758
Tax-exempt				1,573,470					1,339,732				3,048,124					2,690,769
Federal funds sold and other				434,684					414,118				864,924					1,195,035
Total interest income				50,028,252					48,773,869				99,546,578					100,935,262
Interest expense:
Deposits				16,420,194					17,719,109				34,153,979					38,804,742
Securities sold under agreements to repurchase				423,274					567,090				784,061					1,399,143
Federal Home Loan Bank advances and other borrowings				2,672,595					2,805,541				5,396,097					5,690,127
Total interest expense				19,516,063					21,091,740				40,334,137					45,894,012
Net interest income				30,512,189					27,682,129				59,212,441					55,041,250
Provision for loan losses				65,320,390					2,787,470				78,929,925					4,378,593
Net interest income (loss) after provision for loan losses				(34,808,201	)				24,894,659				(19,717,484	)				50,662,657
Noninterest income:
Service charges on deposit accounts				2,568,429					2,684,486				5,045,380					5,258,223
Investment services				1,078,282					1,220,247				1,932,385					2,488,495
Insurance sales commissions				919,342					589,488				2,224,551					1,653,151
Gain on loans and loan participations sold, net				1,633,342					879,824				2,921,114					1,535,912
Net gain on sale of investments securities				2,116,095					1,010,881				6,462,241					1,010,881
Trust fees				641,646					531,458				1,299,354					1,036,458
Other noninterest income				1,645,290					2,142,101				3,852,924					4,442,768
Total noninterest income				10,602,426					9,058,485				23,737,949					17,425,888
Noninterest expense:
Salaries and employee benefits				12,676,044					12,502,540				27,427,093					26,369,277
Equipment and occupancy				4,310,934					3,226,932				8,546,262					7,503,205
Other real estate owned				3,913,628					85,654				4,614,223					139,318
Marketing and other business development				466,201					478,507				905,717					854,378
Postage and supplies				829,548					843,287				1,659,686					1,491,627
Amortization of intangibles				1,164,534					758,033				1,923,067					1,524,066
Other noninterest expense				7,245,521					3,916,573				10,773,386					6,369,214
Merger related expense				-					1,263,622				-					4,315,721
Total noninterest expense				30,606,410					23,075,148				55,849,434					48,566,806
Income (loss) before income taxes				(54,812,185	)				10,877,996				(51,828,969	)				19,521,739
Income tax expense (benefit)				(23,036,434	)				2,916,863				(22,143,426	)				5,495,816
Net income (loss)				(31,775,751	)				7,961,133				(29,685,543	)				14,025,923
Preferred dividends				1,200,694					-				2,388,194					-
Accretion on preferred stock discount				269,612					-				528,954					-
Net income (loss) available to common stockholders			$	(33,246,057	)			$	7,961,133			$	(32,602,691	)			$	14,025,923
Per share information:
Basic net income (loss) per common share available to common stockholders				($1.33	)			$	0.36				($1.34	)			$	0.63
Diluted net income (loss) per common share available to common stockholders				($1.33	)			$	0.34				($1.34	)			$	0.60
Weighted average shares outstanding:
Basic				24,965,291					22,356,667				24,242,160					22,248,292
Diluted				24,965,291					23,629,234				24,242,160					23,519,844
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)			Three months ended												Three months ended
			June 30, 2009												June 30, 2008
			Average Balances				Interest				Rates/Yields				Average Balances				Interest				Rates/Yields
Interest-earning assets:
Loans			$	3,517,254			$	39,627			4.52	%			$	2,941,973			$	42,228			5.77	%
Securities:
Taxable				752,302				8,393			4.47	%				380,733				4,792			5.06	%
Tax-exempt (1)				159,890				1,573			5.21	%				136,216				1,340			5.22	%
Federal funds sold and other				93,557				435			2.01	%				41,931				414			4.42	%
Total interest-earning assets				4,523,003			$	50,028			4.49	%				3,500,853			$	48,774			5.66	%
Nonearning assets
Intangible assets				259,954												259,217
Other nonearning assets				218,532												153,449
Total assets			$	5,001,489											$	3,913,519
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking			$	359,330			$	469			0.52	%			$	379,714			$	1,339			1.42	%
Savings and money market				774,255				2,415			1.25	%				702,933				2,722			1.56	%
Certificates of deposit				2,146,495				13,536			2.53	%				1,466,685				13,658			3.75	%
Total interest-bearing deposits				3,280,080				16,420			2.01	%				2,549,332				17,719			2.80	%
Securities sold under agreements to repurchase				243,765				423			0.70	%				174,847				567			1.30	%
Federal Home Loan Bank advances and other borrowings				255,263				1,615			2.52	%				208,773				1,687			3.20	%
Subordinated debt				97,476				1,058			4.39	%				82,476				1,119			5.46	%
Total interest-bearing liabilities				3,876,584				19,516			2.02	%				3,015,428				21,092			2.81	%
Noninterest-bearing deposits				455,709				-			-					398,337				-			-
Total deposits and interest-bearing liabilities				4,332,293			$	19,516			1.81	%				3,413,765			$	21,092			2.48	%
Other liabilities				19,404												22,252
Stockholders' equity				649,792												477,502
Total liabilities and stockholders' equity			$	5,001,489											$	3,913,519
Net interest income							$	30,512											$	27,682
Net interest spread (2)											2.47	%											2.85	%
Net interest margin (3)											2.75	%											3.24	%
(1) Yields computed on tax-exempt instruments on a tax equivalent basis.
(2) Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
ANALYSIS OF INTEREST INCOME AND EXPENSE, RATES AND YIELDS-UNAUDITED
(dollars in thousands)			Six months ended												Six months ended
			June 30, 2009												June 30, 2008
			Average Balances				Interest				Rates/Yields				Average Balances				Interest				Rates/Yields
Interest-earning assets:
Loans			$	3,467,136			$	78,153			4.55	%			$	2,851,859			$	87,620			6.18	%
Securities:
Taxable				734,409				17,481			4.80	%				373,929				9,430			5.07	%
Tax-exempt (1)				153,959				3,048			5.27	%				136,453				2,691			4.60	%
Federal funds sold and other				87,255				865			2.16	%				50,412				1,195			4.95	%
Total interest-earning assets				4,442,759			$	99,547			4.57	%				3,412,653			$	100,936			5.98	%
Nonearning assets
Intangible assets				260,340												259,012
Other nonearning assets				232,726												172,116
Total assets			$	4,935,825											$	3,843,781
Interest-bearing liabilities:
Interest-bearing deposits:
Interest checking			$	359,426			$	897			0.50	%			$	392,011			$	3,468			1.78	%
Savings and money market				745,141				4,355			1.18	%				719,416				6,820			1.91	%
Certificates of deposit				2,150,962				28,902			2.71	%				1,419,792				28,517			4.04	%
Total interest-bearing deposits				3,255,529				34,154			2.12	%				2,531,219				38,805			3.08	%
Securities sold under agreements to repurchase				236,879				784			0.67	%				171,997				1,399			1.64	%
Federal Home Loan Bank advances and other borrowings				245,132				3,175			2.61	%				176,287				3,112			3.49	%
Subordinated debt				97,476				2,221			4.59	%				82,476				2,578			6.28	%
Total interest-bearing liabilities				3,835,016				40,334			2.12	%				2,961,979				45,894			3.12	%
Noninterest-bearing deposits				436,890				-			-					383,375				-			-
Total deposits and interest-bearing liabilities				4,271,906			$	40,334			1.90	%				3,345,354			$	45,894			2.76	%
Other liabilities				21,742												22,456
Stockholders' equity				642,177												475,971
			$	4,935,825											$	3,843,781
Net interest income							$	59,213											$	55,042
Net interest spread (2)											2.45	%											2.86	%
Net interest margin (3)											2.74	%											3.27	%
(1) Yields computed on tax-exempt instruments on a tax equivalent basis.
(2) Yields realized on interest-earning assets less the rates paid on interest-bearing liabilities.
(3) Net interest margin is the result of annualized net interest income calculated on a tax equivalent basis divided by average interest-earning assets for the period.
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)			June					March				Dec				Sept				June				March
			2009					2009				2008				2008				2008				2008
Balance sheet data, at quarter end:
Total assets			$	5,036,742				4,952,151				4,754,075				4,337,552				4,106,055				3,889,286
Total loans				3,544,176				3,473,959				3,354,907				3,202,909				3,032,272				2,866,536
Allowance for loan losses				(66,075	)			(45,334	)			(36,484	)			(34,841	)			(31,789	)			(29,871	)
Securities				926,085				868,472				849,781				628,807				521,214				505,377
Noninterest-bearing deposits				470,049				451,418				424,757				457,543				438,458				429,289
Total deposits				3,761,444				3,750,958				3,533,246				3,295,163				3,152,514				2,967,025
Securities sold under agreements to repurchase				215,135				209,591				184,298				198,807				183,188				171,186
FHLB advances and other borrowings				228,317				221,642				273,609				207,239				187,315				168,606
Subordinated debt				97,476				97,476				97,476				97,476				82,476				82,476
Total stockholders’ equity				703,772				631,646				627,298				512,569				481,709				476,772
Balance sheet data, quarterly averages:
Total assets			$	5,001,489				4,869,390				4,525,406				4,202,592				3,913,519				3,774,042
Total loans				3,517,254				3,416,462				3,282,461				3,129,549				2,941,973				2,761,745
Securities				912,192				864,280				722,051				590,143				516,949				503,815
Total earning assets				4,523,003				4,354,177				4,077,310				3,765,582				3,500,853				3,324,452
Noninterest-bearing deposits				455,709				417,861				442,267				409,850				398,337				368,413
Total deposits				3,735,789				3,648,567				3,393,234				3,178,863				2,947,669				2,881,518
Securities sold under agreements to repurchase				243,765				229,918				238,310				204,101				174,847				169,146
Advances from FHLB and other borrowings				255,263				234,887				234,482				215,739				208,773				143,802
Subordinated debt				97,476				97,476				97,476				90,465				82,476				82,476
Total stockholders’ equity				649,792				634,481				540,260				502,575				477,502				474,439
Statement of operations data, for the three months ended:
Interest income			$	50,028				49,518				53,273				51,873				48,774				52,161
Interest expense				19,516				20,818				23,381				22,591				21,092				24,802
Net interest income				30,512				28,700				29,892				29,282				27,682				27,359
Provision for loan losses				65,320				13,610				3,710				3,125				2,787				1,591
Net interest income (loss) after provision for loan losses				(34,808	)			15,090				26,182				26,157				24,895				25,768
Noninterest income				10,602				13,136				8,040				9,253				9,058				8,367
Noninterest expense				30,607				25,243				22,586				23,326				23,075				25,492
Income (loss) before taxes				(54,813	)			2,983				11,636				12,084				10,878				8,643
Income tax expense (benefit)				(23,036	)			893				3,583				3,288				2,917				2,579
Preferred dividends and accretion				1,470				1,447				309				-				-				-
Net income (loss) available to common stockholders			$	(33,247	)			643				7,744				8,796				7,961				6,064
Profitability and other ratios:
Return on avg. assets (1)				(2.67	%)			0.05	%			0.68	%			0.83	%			0.82	%			0.65	%
Return on avg. equity (1)				(20.52	%)			0.41	%			5.70	%			6.96	%			6.71	%			5.14	%
Net interest margin (2)				2.75	%			2.72	%			2.96	%			3.14	%			3.24	%			3.37	%
Noninterest income to total revenue (3)				25.79	%			31.40	%			21.19	%			24.01	%			24.66	%			23.42	%
Noninterest income to avg. assets (1)				0.85	%			1.09	%			0.71	%			0.88	%			0.93	%			0.89	%
Noninterest exp. to avg. assets (1)				2.45	%			2.10	%			1.99	%			2.21	%			2.36	%			2.71	%
Efficiency ratio (4)				74.44	%			60.34	%			59.54	%			60.53	%			62.81	%			71.35	%
Avg. loans to average deposits				94.15	%			93.64	%			96.74	%			98.45	%			99.81	%			95.84	%
Securities to total assets				18.39	%			17.54	%			17.87	%			14.50	%			12.69	%			13.00	%
Average interest-earning assets to average interest-bearing liabilities				116.67	%			114.80	%			115.79	%			114.83	%			116.10	%			114.30	%
Brokered time deposits to total deposits (16)				16.51	%			17.39	%			16.55	%			13.95	%			12.53	%			7.78	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands)			June					March				Dec				Sept				June				March
			2009					2009				2008				2008				2008				2008
Asset quality information and ratios:
Nonperforming assets:
Nonaccrual loans			$	100,328				33,863				10,860				17,743				13,067				17,124
Other real estate			$	18,845				19,817				18,306				12,142				9,181				3,567
Past due loans over 90 days and still accruing interest			$	-				3,871				1,508				3,241				2,272				2,002
Net loan charge-offs			$	44,579				4,760				2,068				73				870				190
Allowance for loan losses to total loans				1.86	%			1.30	%			1.09	%			1.09	%			1.05	%			1.04	%
Allowance for loan losses to nonaccrual loans				65.9	%			133.9	%			335.9	%			196.4	%			243.3	%			174.4	%
As a percentage of total loans and ORE:
Past due accruing loans over 30 days				0.52	%			1.12	%			0.60	%			0.61	%			0.34	%			0.77	%
Nonperforming assets				3.34	%			1.54	%			0.86	%			0.93	%			0.73	%			0.72	%
Potential problem loans (5)				4.04	%			2.59	%			0.83	%			0.83	%			0.40	%			0.64	%
Annualized net loan charge-offs year-to-date to avg. loans (6)				2.81	%			0.56	%			0.10	%			0.05	%			0.07	%			0.03	%
Avg. commercial loan internal risk ratings (5)				4.6				4.3				4.2				4.2				4.0				4.1
Avg. loan account balances (7)			$	189				185				177				170				163				170
Interest rates and yields:
Loans				4.52	%			4.57	%			5.27	%			5.60	%			5.77	%			6.61	%
Securities				4.60	%			5.18	%			5.40	%			5.24	%			5.10	%			5.11	%
Total earning assets				4.49	%			4.66	%			5.25	%			5.53	%			5.66	%			6.37	%
Total deposits, including non-interest bearing				1.76	%			1.97	%			2.28	%			2.35	%			2.42	%			2.94	%
Securities sold under agreements to repurchase				0.70	%			0.64	%			0.98	%			1.33	%			1.30	%			1.98	%
FHLB advances and other borrowings				2.52	%			2.71	%			3.24	%			3.40	%			3.20	%			3.99	%
Subordinated debt				4.39	%			4.80	%			5.99	%			5.65	%			5.46	%			7.11	%
Total deposits and interest-bearing liabilities				1.81	%			2.01	%			2.35	%			2.44	%			2.48	%			3.04	%
Capital ratios (8):
Stockholders’ equity to total assets				14.0	%			12.8	%			13.2	%			11.8	%			11.7	%			12.3	%
Leverage				11.1	%			9.7	%			10.5	%			8.7	%			8.5	%			8.5	%
Tier one risk-based				13.3	%			11.8	%			12.1	%			9.8	%			9.3	%			9.5	%
Total risk-based				15.0	%			13.3	%			13.5	%			11.2	%			10.3	%			10.4	%
Tangible common equity to tangible assets				7.4	%			6.0	%			6.2	%			6.2	%			5.8	%			6.0	%
Tangible common equity to risk weighted assets				9.0	%			7.4	%			7.5	%			7.2	%			6.6	%			6.8	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
(dollars in thousands, except per share data)			June					March				Dec				Sept				June				March				Dec
			2009					2009				2008				2008				2008				2008				2007
Per share data:
Earnings – basic			$	(1.33	)			0.03				0.33				0.38				0.36				0.27				0.35
Earnings – diluted			$	(1.33	)			0.03				0.31				0.36				0.34				0.26				0.33
Book value per common share at quarter end (9)			$	18.57				22.30				22.40				21.63				21.33				21.22				20.95
Weighted avg. common shares – basic				24,965,291				23,510,994				23,491,356				23,174,998				22,356,667				22,331,398				17,753,661
Weighted avg. common shares – diluted				24,965,291				24,814,408				24,739,044				24,439,642				23,629,234				23,484,754				19,110,851
Common shares outstanding				32,929,747				24,060,703				23,762,124				23,699,790				22,587,564				22,467,263				22,264,817
Investor information:
Closing sales price			$	13.32				23.71				29.81				30.80				20.09				25.60				25.42
High sales price during quarter			$	24.01				29.90				32.00				36.57				29.29				26.75				30.93
Low sales price during quarter			$	12.86				13.32				22.01				19.30				20.05				20.82				24.85
Other information:
Gains on sale of loans and loan participations sold:
Mortgage loan sales:
Gross loans sold			$	213,218				192,932				72,097				71,903				79,693				59,757				40,273
Gross fees (10)			$	3,032				2,656				1,464				1,293				1,364				1,114				750
Gross fees as a percentage of mortgage loans originated				1.42	%			1.38	%			2.03	%			1.80	%			1.71	%			1.86	%			1.86	%
Commercial loans sold			$	-				-				-				695				8				4				8
Gains on sales of investment securities, net			$	2,116				4,346				-				-				-				-				16
Brokerage account assets, at quarter-end (11)			$	786,000				671,000				686,000				848,000				826,000				859,000				878,000
Trust account assets, at quarter-end			$	580,000				544,000				588,000				537,000				527,000				493,000				464,000
Floating rate loans as a percentage of total loans (12)				39.8	%			40.0	%			41.4	%			41.4	%			44.0	%			41.4	%			41.8	%
Balance of commercial loan participations sold to other banks and serviced by Pinnacle, at quarter end			$	102,515				122,123				125,429				136,069				125,308				113,701				110,352
Core deposits to total funding (13)				48.7	%			46.7	%			50.5	%			50.9	%			52.3	%			57.6	%			58.2	%
Risk-weighted assets			$	3,942,844				3,825,590				3,705,606				3,493,361				3,353,142				3,181,612				3,083,215
Total assets per full-time equivalent employee			$	6,752				6,728				6,614				5,999				5,828				5,669				5,415
Annualized revenues per full-time equivalent employee			$	221.7				226				209.9				214.4				209.8				209.5				161.8
Number of employees (full-time equivalent)				746.0				736.0				719.0				723.0				704.5				686.0				702.0
Associate retention rate (14)				92.5	%			92.1	%			88.9	%			90.8	%			90.9	%			92.0	%			89.7	%
Selected economic information (in thousands) (15):
Nashville MSA nonfarm employment				735.2				733.0				755.4				760.4				758.1				762.0				778.6
Knoxville MSA nonfarm employment				323.8				324.5				332.0				335.7				335.7				335.2				338.7
Nashville MSA unemployment				9.3	%			8.8	%			6.5	%			6.0	%			5.8	%			4.9	%			4.2	%
Knoxville MSA unemployment				8.8	%			8.2	%			6.4	%			5.6	%			5.6	%			4.7	%			4.0	%
Nashville residential median home price			$	170.7				161.0				163.8				169.9				183.6				178.4				187.9
Nashville inventory of residential homes for sale				15.0				14.0				12.9				15.1				15.8				15.1				13.4
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP SELECTED QUARTERLY AND YEAR-TO-DATE FINANCIAL DATA – UNAUDITED
								As of June 30,					As of December 31,
(dollars in thousands, except per share data)								2009					2008
Reconciliation of certain financial measures:
Tangible assets:
Total assets								$	5,036,742				$	4,754,075
Less: Goodwill									(244,116	)				(244,161	)
Core deposit and other intangibles									(15,237	)				(16,871	)
Net tangible assets								$	4,777,389				$	4,493,043
Tangible common equity:
Total stockholders’ equity								$	703,772				$	627,298
Less: Preferred stock									(88,877	)				(88,348	)
Goodwill									(244,116	)				(244,161	)
Core deposit and other intangibles									(15,237	)				(16,871	)
Net tangible common equity								$	355,542				$	277,918
Tangible common equity divided by tangible assets									7.44	%				6.19	%
Tangible common equity per common share								$	10.80				$	11.70
			For the three months ended June 30,										For the six months ended June 30,
(dollars in thousands)			2009					2008					2009					2008
Average tangible assets:
Total average assets			$	5,001,489				$	3,913,519				$	4,935,825				$	3,843,781
Less: Average intangible assets				(259,954	)				(259,217	)				(260,340	)				(259,012	)
Net average tangible assets			$	4,741,535				$	3,654,302				$	4,675,485				$	3,584,769
Average tangible equity:
Total average stockholders’ equity			$	649,792				$	477,502				$	642,177				$	475,971
Less: Average intangible assets				(259,954	)				(259,217	)				(260,340	)				(259,012	)
Net average tangible stockholders’ equity			$	389,838				$	218,285				$	381,837				$	216,959
Net income (loss) available to common stockholders			$	(33,246	)			$	7,961				$	(32,603	)			$	14,026
Return on average tangible assets (annualized)				(2.81	%)				0.88	%				(1.41	%)				0.79	%
Return on average tangible stockholders’ equity (annualized)				(34.21	%)				14.67	%				(17.22	%)				13.00	%
This information is preliminary and based on company data available at the time of the presentation.

PINNACLE FINANCIAL PARTNERS, INC. AND SUBSIDIARIES
SELECTED QUARTERLY FINANCIAL DATA – UNAUDITED
1.		Ratios are presented on an annualized basis.
2.		Net interest margin is the result of net interest income on a tax equivalent basis divided by average interest earning assets.
3.		Total revenue is equal to the sum of net interest income and noninterest income.
4.		Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income and noninterest income.
5.		Average risk ratings are based on an internal loan review system which assigns a numeric value of 1 to 10 to all loans to commercial entities based on their underlying risk characteristics as of the end of each quarter. A "1” risk rating is assigned to credits that exhibit Excellent risk characteristics, "2” exhibit Very Good risk characteristics, "3” Good, "4” Satisfactory, "5” Acceptable or Average, "6” Watch List, "7” Criticized, "8” Classified or Substandard, "9” Doubtful and "10” Loss (which are charged-off immediately). Additionally, loans rated "8” or worse are considered potential problem loans. Potential problem loans do not include nonperforming loans. Generally, consumer loans are not subjected to internal risk ratings.
6.		Annualized net loan charge-offs to average loans ratios are computed by annualizing year-to-date net loan charge-offs and dividing the result by average loans for the year-to-date period.
7.		Computed by dividing the balance of all loans by the number of loan accounts as of the end of each quarter.
8.		Capital ratios are for Pinnacle Financial Partners, Inc. and are defined as follows:
		Equity to total assets – End of period total stockholders’ equity as a percentage of end of period assets.
		Leverage – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of adjusted average assets.
		Tier one risk-based – Tier one capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
		Total risk-based – Total capital (pursuant to risk-based capital guidelines) as a percentage of total risk-weighted assets.
9.		Book value per share computed by dividing total stockholders’ equity less preferred stock and common stock warrants by common shares outstanding.
10.		Amounts are included in the statement of operations in "Gains on the sale of loans and loan participations sold”, net of commissions paid on such amounts.
11.		At fair value, based on information obtained from Pinnacle’s third party broker/dealer for non-FDIC insured financial products and services.
12.		Floating rate loans are those loans that are eligible for repricing on a daily basis subject to changes in Pinnacle’s prime lending rate or other factors.
13.		Core deposits include all transaction deposit accounts, money market and savings accounts and all certificates of deposit issued in a denomination of less than $100,000. The ratio noted above represents total core deposits divided by total funding, which includes total deposits, FHLB advances, securities sold under agreements to repurchase, subordinated indebtedness and all other interest-bearing liabilities.
14.		Associate retention rate is computed by dividing the number of associates employed at quarter-end less the number of associates that have resigned in the last 12 months by the number of associates employed at quarter-end.
15.		Employment and unemployment data is from the US Dept. of Labor Bureau of Labor Statistics. Labor force data is not seasonally adjusted. The most recent quarter data presented is as of the most recent month that data is available as of the release date. The Nashville home data is from the Greater Nashville Association of Realtors.
16.		Brokered deposits do not include balances under the Certificate of Deposit Account Registry Service (CDARS).